Coinbase and Bitpay Don’t Mix

My Experience Using Bitcoin to Buy Gyfts During the Holiday Season

A few weeks ago I attended my first Bitcoin meeting with some locals in my hometown. It was pretty much what I expected walking in: a small group of guys with glasses hanging out around a computer at a coffee shop. I was no different in that regard. I had my computer at the ready, just in case everyone else forgot theirs. I arrived late, sat down and engaged in the first question “How did you all first hear about Bitcoin?” For me, it was the Gawker article on the Silk Road. One other guy had heard about it through some of his friends in programming circles. This guy seemed to know a whole lot about the technical side of Bitcoin, so we all listened to what he had to say about its various intricacies.
Do you guys know about “Gyft?” he asked, before going on to explain how one can use Bitcoin to buy gift cards with it. I actually had heard of Gyft before on the Reddit forums, but never looked into it much. He flashed a $25 gift card complete with barcode using the app. I was intrigued by the concept as I’m always looking for ways to use technology to help minimize the number of physical things I have to keep track of and care for, so when I left the meeting, I went home to check out for myself.
For the uninitiated, Gyft is a company that allows you to store compatible gift cards you might have laying around on your phone via an app. You can use it to refill existing cards, and even send gift cards to others. I downloaded the app and setup my own account. It really was a relief to put the old gift cards I had laying around on my phone where I’d always have them. Some of my cards were so old I wasn’t sure if they still had any value to them. I was so pleased with the whole set-up and sync process that I decided to buy gift cards for my friends and family using Bitcoin, of course.
As serendipity would have it, Gyft was running a special on all transactions made using Bitcoin. Normally one can get 3% back on transactions through Gyft’s point system. For one day only, you could get 4% back using Bitcoin. I made a purchase using Coinbase and awaited confirmation from Gyft, but confirmation never came. My Bitcoin was gone, and I had nothing to show for it other than a Coinbase confirmation that I had sent some Bitcoin to a random address of 30-some characters. I imagined that I’d immediately receive confirmation, or that the gift card would automatically show up in my account, but I didn’t hear anything that night, so I sent an email to customer support and went to bed.
The next day I heard back from Gyft. I was informed that for some reason my order had been “abandoned,” and that I should provide Gyft with my wallet address for a refund. I initially sent them a payment request through Coinbase since they’re who I used for the original transaction, but they wanted an actual address. This was a little confusing to me. I originally used Coinbase to pay for the gift card because I thought that using a third party to help conduct the transaction might be safer should a problem arise. At least then I’d have a third party to back me up should there be some sort of dispute. Since Gyft acknowledged the fact that my transaction had not gone through and offered a refund, I went ahead and provided them with an address where they could refund the money.
I had read on Reddit that there were some incompatibility issues when using Coinbase and Bitpay together. Apparently Coinbase has a 15 minute delay when confirming transactions, while Bitpay requires payment confirmation within 15 minutes to hedge against market volatility. With that time frame, getting a transaction to go through isn’t very realistic when using Coinbase. As it turns out, Gyft uses Bitpay to process all of their Bitcoin transactions. It’s all coming together now.
My other concern was that while sorting through the issue with Gyft, the price of Bitcoin had risen about $100. Just to be clear, that’s fine by me. Anyone spending Bitcoin should know that they may soon regret spending it, or on the contrary, be happy they did should the price go down. My only hope was, no matter what the market did, that I would get the BTC I sent back and not the current market price equivalent. If Bitcoin is to be taken seriously as a currency, returns should be issued this way, and not constantly converted between other currencies.
Well, I finally got an email from Gyft confirming that Bitpay had sent the refund. Apparently the kind folks at Gyft and Bitpay share my philosophy on Bitcoin returns, because when I went to check my wallet, I saw that I had received just as many BTC as I originally had sent. Moreover, the customer service representatives over at Gyft extended the original 4% back offer to my next Gyft purchase!
I must say, although Bitcoin is still a fairly new form of payment and can seem a little strange to use at first, if not a little unnerving when dealing with returns, my overall experience with Gyft in this situation was about as good as it could get. I learned an important lesson about Coinbase and Bitpay being two mutually incompatible forms of payment, and also that it’s always a good idea to only do business with reputable companies. Hopefully Coinbase and Bitpay will work together to resolve this issue, but even if they don’t, using a solid desktop wallet gets the job done well.